Boris Johnson is to make a keynote speech to the Conservative party conference on Tuesday. Photograph: Nils Jorgensen/Rex Features

The row over public transport fares that raged throughout last year's mayoral election campaign enjoyed an anniversary revival last week after the credit rating agency Moodys reported (pdf) that Transport for London had accumulated a budget surplus of £890m in financial year 2011/12. Responding to a refreshed Labour chorus for at least a freeze in the cost of travelling by bus, Tube, tram and DLR, Boris Johnson reprised a loose aspiration to keep future price hikes as small as he can, while TfL renewed its riff that every spare quid is spoken for as part of its long-term investment plan. This tiff will make more comebacks than Iggy Pop, but the core issue behind it never fades – the balance of transport priorities.

No question, TfL needs loads of loot. Government grants have shrunk at the same time as public transport demand - like London's population – is rising fast. This means more of the missing millions being taken directly from you and me. Labour's case, echoing that of its defeated mayoral candidate Ken Livingstone, is that the surplus surpassed TfL's expectations and so should, at least in part, be given back to Londoners. TfL's answer, firmly aligned with the position of the mayor, is that its big spending needs mean the surplus isn't really spare money at all.

Labour's argument has great force because low cost public transport and any measure that puts spending cash in Londoners' pockets, especially its lowest paid, are desirable goals for the city as a whole. But TfL makes a solid point: its boss Sir Peter Hendy has spelled out the continuing, massive pressures on the system's capacity, and the consistency of the mayor's fares policy has long been welcomed by its planners. Moodys also remarked on TfL's manageable but high levels of debt. With austerity threatening to become normalized in government, how can any mayor pursue the strong principle of holding fares firmly down and afford big enhancements of the system at the same time?

In some significant ways, Mayor Johnson has made this predicament more acute. His high profile cycle hire and cable car projects have cost TfL far more than he'd predicted and his new bus, which has its virtues, is nonetheless making further claims on resources that could have been used in other ways. Most significantly, halving the congestion charge zone at the end of 2010 has already cost TfL up to £140m, according to its estimates at the time.

The mayor can justly claim that most of these moves delivered manifesto pledges, but the price of his innovations has been higher than advertised – unfortunate, given his boasts about providing value for money – and abolishing the "WEZ", despite its drawbacks for some, was a prime example of putting vote-chasing before policy vision. Road-pricing doesn't only bring in cash, it smooths the flow of city economies by persuading motorists off the road. Johnson conducts the Conservative clamour for new rules to bind Bob Crow, but both TfL and London First, which represents the capital's larger businesses, have produced estimates of the drain of traffic snarl ups on profits that dwarf that said by the Chamber of Commerce to result from Tube strikes.

The size of the financial challenges faced by TfL could not all have been predicted in 2008 when the Tory mayor came to power, but his mostly populist and piecemeal transport strategies haven't helped with meeting them, leaving passengers to pick up more of that big investment bill. A man of his political instincts is unlikely to change course, but potential successors should start devising alternative approaches now.